Appeals Court clears lawyer of Fruad Charges

After being held in preventive detention for a total of almost 18 months, attorney Arcelio Hernandez Mussio was cleared of fraud charges by the San Ramon Court of Appeals on February 15, 2016. The investigation on this case began back in June of 2010, when seven US citizens claimed that their lawyer, who represented an Escrow company called Bufete Hernandez Mussio y Asociados S.A., also known as CRTitle, duly registered with the financial authorities of Costa Rica to hold custody of third-party funds, had mismanaged the money entrusted to the firm for the purchase of a Samara hotel. On May 31st, 2010, a meeting was called in order to re-negotiate the terms originally agreed to in an option to purchase contract signed in March of that same year, because the US investors had not been able to put together the price, which was agreed to at $780,000. Because Hernandez lost his flight that morning, some of the US investors thought it proper to go to the Liberia branch of Scotiabank and violate bank privacy laws, by illegally obtaining information on the firm's bank accounts. Hernandez has always maintained that the reason for moving funds from one of the firm's accounts to another, was to place the funds in an account from which he could do bank-to-bank transfers, and that these movements were normal practice for the same Escrow company. But the US investors went further, and with the help of a branch manager in Liberia, managed to freeze all of the lawyer's bank accounts without a court order. Not only that, but Hernandez produced evidence during trial that the leader of the US investor group threatened him: "You better get protection", as was heard in a recording from a message left on Hernandez' cell phone that same day. After these events, a frightened Hernandez sought protection, and began to try to communicate with the investors to come to an agreement on how to return the funds, and the amount to be returned, as part of the funds that were sent to the firm's account were for legal fees, and the purchase of two Costa Rica corporations, which would have been used, had the buyer and the seller come to an agreement on new terms for the purchase, which had been a topic of discussion, and some progress had been made, as the seller had said he was willing to finance some $200,000 in order for the transaction to be completed. The Public Ministry began then to investigate movements on the firm's accounts, and used a withdrawal in the amount of $4000 which Hernandez made on May 28, 2010, as the basis for its theory that Hernandez had mismanaged the funds. Prosecutors obtained video of Hernandez withdrawing the funds from a Scotiabank branch in Santa Ana. What they did not take into account, was the fact that Hernandez had funds of his own in that same bank account, as well as funds deposited by other clients, as the account used by the US investor group, was used by the Escrow Company to receive international wire transfers, and then the funds were placed in other accounts under the control of Hernandez and his firm, as he saw fit in order to comply with the different Real Estate contracts for which he kept custody of funds. That was the basis for the grave mistakes in the investigation, in which Hernandez asked on repeated occassions to be given a formal notice by the authorities as to the amount he was to return to the investors, which had made multiple wire transfers, from local and foreign banks. Because the Public Ministry took a very strong stance based on that error, they never agreed to give Hernandez the formal notice, which is what the Appeals Court judged as a mistake, and therefore nullified the conviction which meant a 10-year prison sentence against Hernandez Mussio. The Escrow Company Bufete Hernandez Mussio y Asociados S.A. has handled hundreds of Real Estate transactions in Costa Rica, involving millions of dollars, and never had a problem such as this one, where clients violated bank secrecy laws, froze bank accounts, threatened a company representative, and then declined to negotiate a way out of the problem. Hernandez plans to file a lawsuit against the State for damages, because the law stipulates that without the formal 5-day-notice to return funds, there is no crime committed under Costa Rican law, and the prosecutors and judges involved in the case violated the fundamental rights of attorney Hernandez, for which he has already won three cases with the Supreme Court's Constitutional Chamber (Sala Constitucional). Hernandez has always had a good reputation among his national and foreign clients, and plans to continue his work in defence of father's rights and other political causes, including a better criminal policy, so that people who undergo a prison sentence have better opportunities to be rehabilitated and reinserted into productive society.